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New Challenges in Employment Law:
Heightened Responsibilities for Employers in an Era of
Accountability and Transparency
Deborah C. Brown1
Introduction
The first segment of this two-part presentation on employment law examines the existing
framework of employment laws as they play out across campus during a down economy.
Today‘s environment requires employers to focus on preventive practices, good decision-
making, and the need to insure that long term success is not compromised by short term choices.
Part I of these materials briefly addresses the legal and practical risks associated with layoffs,
including general planning and implementation considerations, waivers and releases, and the
new COBRA subsidy legislation.
Part II encompasses some of the unintended or unanticipated consequences that might
occur in a down economy, namely, legal mistakes in the use of furloughs, unintended
consequences of technology, and the potential for union organizing and what that might look like
under the Employee Free Choice Act.
I. Layoffs, RIFs, and Related Issues
The current economic conditions have forced colleges and universities to closely examine
their complement of programs and staffing levels as part of broader cost-cutting efforts. Even
during the best of times, change can be hard. In this climate, the uncertainty in the employment
market for those whose positions may be eliminated and the challenges faced by administrators
in trying to fairly effectuate the changes needed to maintain financial stability while retaining
key talent are particularly challenging. In this section, we will examine some of the issues and
risks associated with these important decisions.
A. Making Choices
Who to let go and who to keep? How do you decide? How do you keep your best
people? How do you avoid so devastating the morale that productivity all but disappears? All
hard questions… and ones for which no single clear answer emerges. The economic downturn
has yielded some interesting patterns of action. The mainstream approach in higher education
has largely been to develop a structured process for determining staff layoffs, and addressing the
myriad of associated issues like eligibility for rehire, benefits continuation, ―bumping‖, and other
such issues. This model is discussed more below.
Interestingly, though, it can be said that some consider the economic climate an
opportunity as well. For example, one recent study by Veritude, Inc., a staffing company,
described an interesting perspective on layoffs. The study, titled The New Normal: Recession
1 Deborah C. Brown is the Associate Vice President for Legal Affairs and Human Resources at Stetson University
College of Law. This paper has been presented at the Stetson University College of Law 31st Annual National
Conference on Law and Higher Education in February 2010.
2
Response and Workforce Planning,2 was unsurprising in its reporting that 62% of companies
surveyed indicated that they had laid off employees as a direct response to the current economic
climate. Other reported practices included lowered wages (22%) or reduced benefits (18%), the
next two most common responses. What was interesting (and somewhat surprising) was the
study‘s conclusion that the plethora of qualified applicants and the relative ease with which
companies can obtain qualified applicants ―is enabling companies to re-engineer their workforce
at the micro level.‖ According to the study, 63% of companies ―report that they are actively
replacing low-performing employees with high-performing new hires in preparation for
economic recovery.‖ At least one commentator has already weighed in with the risks of such an
approach.3
So what does one do? Employment litigation has become so prevalent that the likelihood
of emerging from a layoff without at least some level of claims or grievances seems somewhat
remote. What colleges and universities can do is put in some time and effort up front to
understand their rights, the risks, and then plan for change in a way that minimizes them insofar
as is reasonably feasible.
B. The Right to Layoff
At the initial stage when it seems that a reduction in staffing may be necessary, one good
starting place is to understand what are and are not the institutional rights in this regard. Such a
seemingly straightforward question is not always so simplistic. Consider first you may already
have published policies and procedures, or even collective bargaining agreements that detail this
issue and describe both when layoffs will occur and even how they will be implemented.
Depending on status as a public or private employer, the status of particular employees as
tenured faculty or ―at will‖ staff or staff with civil-service type protections, whether you are in a
union or non-union setting, and even the state you are in4, the answer may not be the same. Only
after you have reviewed this issue fully and determined your starting point can you begin to plan.
This process will also help to determine where gaps may exist in policies or where important
issues have been left unaddressed and will require new or revised policies.
As one examines this issue, it is worth noting some special considerations related to
faculty and tenure. Whether binding or not, it is at least important to understand the American
Association of University Professors‘ perspective when dealing with financial crises. The
AAUP has established a web page devoted to this issue, with numerous links to helpful
information in this regard.5 One important element to note is that the AAUP definition of a
―financial exigency‖ may not match your own institutional definition.6 From a litigation
2 Available at https://www1.vtrenz.net/imarkownerfiles/ownerassets/1010/ReportRd11.pdf (last accessed 1/27/10).
3 See, e.g., Cappelli, Peter, Commitment Takes Another Hit, Human Resource Executive Online (7/20/09), available
at http://www.hreonline.com/HRE/story.jsp?storyId=233187998 (last accessed 1/27/10). 4 See, e.g., Pachla v. Saunders System, Inc., 899 F. 2d 496 (6
th Cir. 1990)(Implied contract claim over layoff under
state law can go to jury when factual questions exist on economic necessity); King v. Michigan Consol. Gas Co.,
442 N.W. 2d 714 (Mich.App.1989)(employee can challenge layoff where employer failed to follow own
procedures) But see, Dabrowski v. Warner-Lambert Co., 815 F. 2d 1076 (6th
Cir. 1987)(where employer retained
broad discretion in deciding who to retain, no breach of contract) 5 See Financial Crisis FAQs, available at http://www.aaup.org/aaup/financial/mainpage.htm (last accessed 1/27/10).
6 See, e.g., Olswang, Steven G., et al, Retrenchment, 30 J.C.& U.L. 47 (2003); Dixon, Thomas M., et al, Case
Comment: Pace v. Hymas: Termination of Tenured University Faculty: Financial Exigency and the Burden of Proof
in a Substantive Due Process Claim, 13 J.C. & U.L. 417 (Spring 1987); Burke, Janell Seitz, Financial Emergency as
3
standpoint, a university declaration of a financial exigency is often examined on a case-by-case
basis. Factors to consider can include everything from enrollment declines to elimination of
nonessential programs, and other reductions in non-salary expenses.7 Moreover, some courts
have granted deference to academic institutions on financial exigency even in the absence of
specific enabling policies.8 The American Council on Education has published a comprehensive
monograph titled Faculty in Times of Distress —Examining Governance, Exigency, Layoffs, and
Alternatives and authored by Ann Franke that discusses the faculty aspects of this issue in great
detail.9
Apart from examining the legal right to lay off and any restrictions on that right, it almost
goes without saying that all those involved in the assessment and planning for layoffs must be
familiar both with specific legal obligations that may attach and with the legal framework
governing the actual selection of employees to be affected.
On the first issue, specific legal obligations that may attach, one example is that if the
layoff is of sufficient magnitude, the provisions of the Worker Adjustment and Retraining
Notification Act (WARN) may apply.10
This law is complex, with various definitions of key
terms like ―plant closings11
‖ and mass layoffs12
‖, what constitutes an ―employment loss13
‖ and
what exceptions to notice exist.14
a Grounds For Dismissal of Tenured Faculty in the Washington Community College System, 19 Gonz.L.Rev. 105
(1983/1984). 7 See, e.g., Klein v. Board of Higher Education of City of New York, 434 F. Supp. 1113 (S.D.N.Y.1977)(detailed
plan developed, including reduction in personal services, staff reduction, supplies, equipment, telephone and
facilities); Board of Community College Trustees v. Adams, 701 A.2d 1113 (Md.App.1996)(allowing tenure to be
terminated for reasons not personal to faculty based on necessary or preferred discontinuance of program, declining
enrollment, or financial problems necessitating termination of programs, positions or courses). 8 See, e.g., Krotkoff v. Goucher College, 585 F.2d 675 (4th Cir. 1978); Jimenez v. Almodovar, 650 F.2d 363 (1st Cir.
1981). 9 Available at
http://www.acenet.edu/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID
=32783 (last accessed 1/27/10. See also, Hustoles, Tom, Workforce Reductions Practical Suggestions for Making
Them in a Legally Defensible Way, Vol. 53 CUPA-HR Journal No. 1 (Spring/Summer 2002). 10
See 29 U.S.C. §2101, et seq.; 20 C.F.R Part 39. Note also that a number of states have enacted their own
WARN-type statutes. For some helpful resources, see The Worker Adjustment and Retraining Notification Act — A
Guide to Advance Notice of Closings and Layoffs, U.S. Department of Labor Employment and Training
Administration Fact Sheet, available at http://www.doleta.gov/programs/factsht/warn.htm (last accessed 1/27/10).
See also, Friedman, Steven J., et al, And You Thought the Bailout Was Bad: Employment Law Risks in the Current
Financial Crisis, Littler Mendelson (October 2008), available at
http://www.littler.com/PressPublications/Documents/2008_10_Insight_BailoutBad_EmploymentLawRisk_CurrentF
inancialCrisis.pdf (last accessed 1/27/10) and THE WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION (WARN) ACT —Employer’s Guide to Advance Notice of Closings and Layoffs, Employment and
Training Administration, U.S. Department of Labor (July 2003), available at
http://www.doleta.gov/layoff/pdf/EmployerWARN09_2003.pdf (last accessed 1/27/10). 11
See 29 USC 2101(a)(2). 12
See 29 USC 2101(a)(3). 13
See 29 USC 2101(a)(6) and 2101(b). 14
For example, WARN contains both an ―unforeseen business circumstances‖ exception in 29 U.S.C.
§2102(b)(2)(A) and a ―faltering company‖ exception (applicable only to plant closings) at 29 U.S.C. §2102(b)(1).
Even then, the employer must provide written notice as soon as practicable with an explanation as to the basis for
the reduced notification period. See 29 U.S.C. §2101(b)(3).
4
The decision on whether a layoff will be covered by WARN‘s requirements is not always
clear. It is important to remember, though that even if a layoff is initially not covered by
WARN, WARN contains an aggregating feature where reductions over time may be
consolidated for purposes of determining the employer‘s WARN obligation. Employment losses
occurring in two or more groups that, by themselves, do not meet the minimum threshold could
potentially be aggregated if those losses occur within a ninety-day period. The regulations set
forth both 30-day and 90-day ―look ahead and look back‖ provisions for employers to determine
if aggregation will apply.15
The employer should be able to avoid aggregation if it demonstrates
that the losses are "separate and distinct" and are not an attempt to avoid WARN.16
This means
that WARN may apply retroactively to layoffs that, when made, did not require sixty days'
notice, but that trigger the notice requirements when added to subsequent layoffs. Under 20
C.F.R. § 639.5(a), an employee's last day of employment is considered the date of that
employee's layoff. Further, any cause of action under WARN does not accrue until enough
employees are terminated to constitute an aggregated mass layoff, a significant point if an
employee has signed a release because the release may not bar a subsequently accruing WARN
claim.17
Note also that bills are pending in both the House and Senate to expand WARN. In June
2009, members of the House and Senate reintroduced the Federal Oversight, Reform, and
Enforcement of the WARN (FOREWARN) Act (H.R. 3042, S. 1374). This legislation would
amend the Worker Adjustment and Retraining Notification (WARN) Act by requiring more and
smaller employers to notify workers of mass firings or plant closings and increasing employer
penalties and enforcement mechanisms.
On the second issue, that of the legal framework governing the selection of employees, a
myriad of state and federal laws preclude decision-making based on factors or characteristics the
law has chosen to protect, such as race, sex, color, religion, age, etc… Such claims can often be
pursued under either a disparate impact or disparate treatment analysis, so these are key concepts
to understand.
In general, a disparate impact claim is established by the showing that the action in
question (in this case, a layoff) had a statistically significant impact on a protected group.18
This
is typically a numbers game, with statistical analysis needed to insure this does not occur, or that
if it does, that the decision can nonetheless be defended as consistent with business necessity.
The EEOC‘s recently updated fact sheet on the use of employment tests and selection
procedures, even though focused on hiring and promotion, is helpful in explaining this general
concept.19
Disparate treatment claims typically involve the individual selectee, who claims that
he or she in particular was selected for a reason not permitted by law. Depending on whether the
15
See 20 C.F.R. § 639.5(a)(1)(i) and 20 C.F.R. § 639.5 (a)(1)(ii). 16
See, e.g., Hollowell v. Orleans Regional Hospital, LLC., 217 F.3d 379 (5th Cir. 2000) (holding layoffs occurring
from a continuing economic demise did not result from separate and distinct causes). 17
See, e.g., Allen v. Sybase, Inc., 468 F.3d 642 (10th Cir. 2006). 18
Disparate impact as a viable theory of discrimination even in the absence of specific intent had long been held
cognizable under Title VII, and was recognized under the ADEA in 2005. See, e.g., Griggs v. Duke Power Co., 401
U.S. 424 (1971) and Smith v. City of Jackson, 544 U.S. 228 (2005). 19
See Employment Tests and Selection, EEOC (June 23, 2008), available at
http://www.eeoc.gov/policy/docs/factemployment_procedures.html (last accessed 1/31/10).
5
individual claims the employer used criteria protected under Title VII or the Age Discrimination
in Employment Act (ADEA), the analysis can vary somewhat.20
To summarize briefly then, a few key questions at this initial rights assessment phrase to
consider:
From what source(s) does the right to declare a financial exigency arise (i.e.,,
inherent, by contract, under state law, …);
Is the institution bound by any specific definition or process to invoke such a
declaration;
Once so determined, do these sources require or recommend a particular order to
things in terms of identifying and accomplishing cost reductions and defining the
obligations attendant to those efforts;
What state, federal, or local law obligations may be implicated as the process
progresses.
C. Planning and Assessment
Once you understand the framework of institutional rights and obligations, the actual
planning process begins. In this regard, the employer is left to the detail work of determining
why a layoff is needed, and typically whether alternative measures, such as hiring freezes,
elimination of travel, etc…, might accomplish the same goals.21
Such planning efforts, if done
well and documented, can be useful in defending subsequent claims.22
The planning process
might include elements as basic as eliminating unneeded functions,23
making changes for
efficiency or other legitimate reasons,24
or might more broadly encompass possible program
reduction or program elimination.25
It is preferred that these decisions are made in a reasonable
way, and where possible, without a focus or reference on the incumbents to be affected. At this
point, it is the institution‘s goals and needs that are the focus of the inquiry.
20
Under Title VII, an unlawful employment practice is established when he plaintiff demonstrates race, color,
religion, sex or national origin was a motivating factor in the decision, even though other factors may also have
motivated the practice. See 42 U.S.C. §2000e-2(m). On discriminatory intent based on age under the ADEA, the
plaintiff must prove age was the ―but-for‖ cause of the challenged adverse employment action. See Gross v. FBL
Financial Services, 129 S. Ct. 2343 (2009). A shifting burden of proof/burden of production analysis is typically
used to determine the ultimate issue of discrimination. See generally, Texas Dept. of Community Affairs v. Burdine,
450 U.S. 248 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). 21
See, e.g., Franke, Ann H., Faculty in Times of Distress — Examining Governance, Exigency, Layoffs and
Alternatives, American Council on Education (2009) at Appendix A; see also, e.g., Pace v. Hymas, 726 P. 2d 693
(Idaho 1986). 22
See, e.g., Tice v. Lambert Yards, Inc., 761 F. 2d 1210 (7th
Cir. 1985). 23
See, e.g., Holley v. Sanyo Mfg., Inc., 771 F. 2d 1161 (8th
Cir. 1985)(consolidation of two positions); Parcinski v.
Outlet Co., 673 F. 2d 34 (2d Cir. 1982), cert. denied, 459 U.S. 1103 (1983)(elimination of buyer position a business
decision made on rational basis); Mizrany v. Texas Rehabilitation Commission, 522 F. Supp. 611 (S.D.Tex. 1981),
affd. mem., 685 F. 2d 1384 (5th
Cir. 1982)(employer established position properly selected for elimination based on
determination it could be eliminated without client impact). 24
See, e.g., Jorgensen v. Modern Woodmen of America, 761 F. 2d 502 (8th
Cir. 1985)(reducing size of larger
territories based on business judgment). 25
For a detailed discussion of program reduction and program elimination in the context of faculty rights, see
Olswang, Steven G., et al, Retrenchment, 30 J.C.&U.L. 47 (2003.
6
One method is using the ―institution today/institution tomorrow‖ framework to examine
all existing programs and services. These can be categorized as ―must have‖, ―should have‖ and
―nice to have‖, depending on the institution‘s larger mission and the academic program elements
deemed essential to its long term success. Rarely are across-the-board percentage reductions
effective from a strategic standpoint. Such an approach is a hatchet rather than a scalpel and
does not consider the proper allocation of resources based on institutional priorities. Rather, at
this stage, defining what the institution does today and what it will no longer do tomorrow allows
for an objective strategic assessment without the detail of the ―people part‖ of the equation. That
step comes later, after the larger assessment is done, and is more often the subject of controversy
as individuals dispute their selection for layoff.
D. Criteria and Appeals
As part of the initial rights assessment, the employer may have determined that the
criteria for layoff have already been defined. For example, a not uncommon feature in collective
bargaining environments is a provision dictating that layoffs will occur by seniority. Seniority
under both Title VII and the ADEA is generally not considered problematic.26
Assuming the
definition of seniority (i.e., service as a whole, service in specific position, or service in any
position covered by the agreement) is clear, this may be the easiest part of the process. Often
though, such matters are either not defined, or are defined but with exceptions based on the need
to retain particular skills. At the planning and assessment stage, one presumably has determined
the basic framework of change to be considered, and this stage now requires a further level of
detail on how to get there. Cuts that do not involved job loss are institutionally painful but do
not typically generate the level of angst that accompanies job loss.
In deciding on the criteria for selection, it is important to understand the distinction
between objective and subjective criteria. Objective criteria are typically those items not easily
subject to dispute, such as tenure, seniority, length of employment, specific productivity
measurements, or possessing certain measurable or identifiable skills or qualities. Subjective
criteria, on the other hand, are those factors not easily quantifiable. One example of a definition
of subjective criteria is criteria that are ―not fixed, not measurable, and not objective regarding
employment qualifications, selection standards or processes that require judgment in application,
such that different persons applying such criteria/procedures would not necessarily reach the
same conclusion. A criterion is subjective if it is not fixed or measurable.‖27
While not unlawful
per se, subjective criteria are often examined more closely because of the potential that can mask
discrimination.28
Even when using subjective criteria, avoiding generalized terms like ―attitude‖,
26
The ADEA exempts from is coverage actions taken by an employer under a bona fide seniority system not
intended to evade the purposes of the law. See 29 U.S.C. § 623(f)(2)(A). Likewise, Title VII contains a disparate
impact exemption for bona fide seniority systems and certain other bona fide systems. See 42 U.S.C. § 2000e-2(h). 27
See Glossary of EEO Terms, Office of Equity and Diversity, Montgomery College, available at
http://www.montgomerycollege.edu/Departments/oed/glossarycontent.htm#s (last accessed 1/30/10). 28
As once court explained, ―[i]t is true that an employer's use of subjective criteria may leave it more vulnerable to a
finding of discrimination, when a plaintiff can point to some objective evidence indicating that the subjective
evaluation is a mask for discrimination‖. See Sattar v. Motorola, Inc., 138 F.3d 1164, 1170 (7th
Cir. 1998).
Nonetheless, in the absence of discrimination, the general rule is that a company has the right to make business
judgments on employee status, particularly when the decision involves subjective factors deemed essential to certain
positions. Id. When an employer relies on subjective criteria, the employer should be able to articulate ―a clear and
reasonably specific factual basis upon which to base its subjective opinion.‖ See Chapman v. A-1 Transport, 229 F.
3rd
1012, 1033 (11th
Cir. 2000(en banc).
7
―teamwork‖ and ―flexibility‖ unless a level of specific factual detail can be determined is
generally recommended. It is more defensible to base decisions on an accurate assessment of an
employee‘s skills, and also the ability of the employee to perform the work that will remain after
the layoff.29
Having and following well-defined criteria are critical elements in defending subsequent
litigation.30
For example, the use of performance evaluations as a criterion is easier when
supported by specific factual detail and where safeguards in the process allowing employees to
review and comment were present.31
It is also important at this stage to conduct any necessary
disparate impact assessment to insure the criteria selected do not have unintended consequences
for which the institution may be liable.
Finally, having an appeal process whereby employees can challenge their selection for
layoff is important. For public institutions and staff from a due process standpoint32
and as a
routine practice by policy for private institutions, having the means by which to independently
review challenged decisions and verify that the established criteria were applied properly can
provide an important check against error and may reduce the potential for litigation.
E. Softening the Blow
As part of the layoff plan development, measures the employer would take to cushion
employees from the impact should also be a point of discussion. While it is not uncommon to
have policies that address the criteria to be used, an often-neglected area is considering what can
(or should be done) for both those let go and those who remain. For those being let go,
employers options abound. To name just a few that might be worthy of considering:
Leave Usage Prior to Separation Date: Consider whether, if an employee will have a
leave balance to be paid in a lump sum at separation, the leave can instead be used to
extend employment, thus allowing the employee to take advantage of any employer
cost-sharing elements of employee benefits.
29
See, e.g., Baines v. GenCorp Inc., 896 F. 2d 1457 (6th
Cir. 1990), cert. denied, 498 U.S. 878 (1990)(mere retention
of employee under 40 in RIF, by itself, not sufficient for prima facie case). But see, Haroldsen v. Omni Enterprises,
901 P. 2d 426 (AK 1995)(rejecting Barnes formulation of prima facie case and requiring employer to articulate
reasoning for decision). 30
See, e.g., Duke v. Uniroyal Inc., 928 F. 2d 1413 (4th
Cir. 1991)(employer failed to follow its own EEO policy in
recognizing seniority in RIF). 31
See, e.g., Mastie v. Great Lakes Steel Corp., 424 F. Supp. 1299 (E.D. Mich 1976)(defendant undertook a
concerted and genuine effort to evaluate the employees in the evaluated group and evaluations were conducted
impartially, conscientiously and without any intention to do anyone an injustice); Stoller v. Marsh, 682 F. 2d 971
(D.C. Cir. 1982), cert denied, 460 U.S. 1037 (1983)(proper safeguards in evaluative process enhance ability of
employer to later rely upon them). 32
This is often a state law issue, with the applicable state statute dictating the process to be followed, and also
appeal rights. See, e.g., Ga. Code Ann. §45-20-19 (specifying 30 days notice required with certain essential
elements to be specified in notice); N.J.S.A. 11A:8-4 (appeal permitted for layoff); KRS §151B.087(describing
appeal process for layoffs); Koo v. Commonwealth of Kentucky Department for Adult and Technical Education, 919
S.W. 2d 531 (Ky.App. 1995)(unlike discipline, in challenging validity of layoff, employee bears burden of showing
non-compliance with statute). Good faith by the decision-maker is often a litigated element in the public sector.
See, e.g., Pearson, James O., Determination as to good faith in abolition of public office or employment subject to
civil service or merit system, 87 A.L.R. 1165 (2009).
8
Severance Pay: Paying a period of wages, either as a lump sum payment or over
time, may assist employees in transitioning to other work. Note that the treatment of
these payments may or may not offset unemployment benefit payments depending on
their characterization as severance or ―wages in lieu of notice‖.
Outplacement Support: Providing job search assistance can be highly beneficial to
employees who may have been on the job market. Job search techniques, resume
review, and the like can help these employees land other jobs.
Recall Rights: A common feature in unionized environments, this would guarantee
an option to return if conditions change and the employee‘s former position becomes
available. Consider having a caveat that such a right may be extinguished if an
intervening factor (such as a felony conviction) renders an employee unsuitable for
reemployment.
Rehire Consideration: Granting some level of enhanced or preferential consideration
for a period of time after layoff can provide a measure of assistance.
Unemployment Assistance: A laid-off employee will typically qualify for
unemployment benefits but some find the process daunting. Offering guidance on
how to seek this benefit can be helpful.
Counseling Services: Often access to an employer‘s EAP program ends with
employment. Can the benefit be extended for a period of time to assist employees
with the stress associated with job loss?
References: Many employers follow the standard ―neutral reference‖ practice,
releasing only the most minimal of information to prospective employers. Consider
whether this should be changed. In so doing, remember that it is always best to be
honest if references are granted. If you write a glowing reference on an employee
selected for layoff based on poor performance, the letter will likely be used as
evidence of pretext if the employee later claims an impermissible motive was sued in
his or her selection for layoff.
Those that remain present a different challenge. Layoffs can drastically affect morale and
engagement. A clear communication strategy for those that remain should be developed to try
and lessen the morale impact caused by the layoff.33
F. Waivers and Releases
No discussion of layoffs or staff reductions would be complete without some discussion
on the issue of waivers and releases. Listed above are a variety of things an employer might do
for a laid off employee. To the extent any of those that the employer decides to do is not
something to which the employee may already be entitled, such additional measures may be
sufficient ―consideration‖ for which the employer may seek a release of claims to reduce its
33
See, e.g., Bienati, Lawrence M., Coping with Job Transition (2003), available at
http://adman.ucdavis.edu/conference08/Coping%20wiith%20Job%20Transition.pdf (last accessed 1/30/10); Carey,
W.P., Survival of the Smartest: After the Layoffs, Manage for Long-Term Stability, Knowledge @W.P. Cary,
available at http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1766 (last accessed 1/30/10); Rogoski, Richard
R., Humane layoffs take clear planning, communication, Triangle Business journal (10/3/03), available at
http://triangle.bizjournals.com/triangle/stories/2003/10/06/focus2.html (last accessed 1/30/10).Walters, James,
Layoff, Morale and Right-Communication, Inc. Newsletter (5/8/01), available at
http://www.inc.com/articles/2001/05/22608.html (last accessed 1/30/10).
9
litigation risk. Often required when severance benefits are paid, a release can help insulate the
employer from later litigation over an employee‘s separation.
Certain legal principles must be taken into consideration in the drafting of these releases.
As a starting point, and given that claims of employment discrimination are among the most
likely to occur, let‘s examine first the EEOC‘s position on this issue. In response to the current
climate, the EEOC issues a new policy guidance document on July 15, 2009, titled
Understanding Waivers of Discrimination Claims in Employee Severance Agreements (hereafter
―Waiver Guidance‖).34
Within the Waiver Guidance, the EEOC first begins a basic framework, explaining that
some distinctions do exist between releases for claims under the ADEA by virtue of the specific
release requirements in the Older Workers Benefit Protection Act (OWBPA) and those that arise
under other employment statutes like Title VII. The EEOC then summarizes its view of the
general standard for release validity stating:
A waiver in a severance agreement generally is valid when an employee
knowingly and voluntarily consents to the waiver. The rules regarding whether a
waiver is knowing and voluntary depend on the statute under which suit has been,
or may be, brought. The rules for waivers under the Age Discrimination in
Employment Act are defined by statute – the Older Workers Benefit Protection
Act (OWBPA).35
Under other laws, such as Title VII, the rules are derived from
case law. In addition to being knowingly and voluntarily signed, a valid
agreement also must: (1) offer some sort of consideration, such as additional
compensation, in exchange for the employee‘s waiver of the right to sue; (2) not
require the employee to waive future rights; and (3) comply with applicable state
and federal laws.36
Waiver Guidance at Section III (bold and footnotes in original).
Addressing first the issue of waivers under Title VII, the ADA and EPA, the EEOC
explains what constitutes a ―knowing and voluntary‖ waiver, listing the common factors court
will consider under a totality of circumstances test to determine if a release is valid. As
explained by the EEOC:
34
Available at http://www.eeoc.gov/policy/docs/qanda_severance-agreements.html (last accessed 1/27/10). 35
See Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). 36
State law typically governs questions regarding the proper construction of a severance agreement and the validity
of waivers. For example, under the Minnesota Age Discrimination Act, a release must give the employee fifteen
days after signing the agreement to change his mind and revoke his signature. Under California law, a waiver cannot
release unknown claims unless the waiver agreement contains certain language specifically providing for such a
waiver. Other states may impose additional requirements to obtain an effective waiver of certain state law claims. To
determine whether a severance agreement is enforceable in the state in which you work, contact your state labor law
department or consult with an attorney for legal advice.
In addition to waiver issues, workforce reductions or other substantial business changes often trigger additional legal
obligations arising, for example, under the Worker Adjustment and Retraining Notification Act (WARN), the
National Labor Relations Act (NLRA), the Employee Retirement Income Security Act (ERISA), relevant benefit
plans, and labor contracts.
10
To determine whether an employee knowingly and voluntarily waived his
discrimination claims, some courts rely on traditional contract principles and
focus primarily on whether the language in the waiver is clear.37
Most courts,
however, look beyond the contract language and consider all relevant factors – or
the totality of the circumstances -- to determine whether the employee knowingly
and voluntarily waived the right to sue.38
These courts consider the following
circumstances and conditions under which the waiver was signed:
whether it was written in a manner that was clear and specific enough for
the employee to understand based on his education and business
experience;
whether it was induced by fraud, duress, undue influence, or other
improper conduct by the employer;
whether the employee had enough time to read and think about the
advantages and disadvantages of the agreement before signing it;
whether the employee consulted with an attorney or was encouraged or
discouraged by the employer from doing so;39
whether the employee had any input in negotiating the terms of the
agreement; and
whether the employer offered the employee consideration (e.g., severance
pay, additional benefits) that exceeded what the employee already was
entitled to by law or contract and the employee accepted the offered
consideration.
Waiver Guidance at Section III (footnotes in original).
The Waiver Guidance then provides some examples from case law, one where the waiver
was determined valid and one on which it was not.40
The non-ADEA portion of the discussion
37
See e.g., Morrison v. Circuit City Stores, 317 F.3d 646 (6th Cir. 2003)(―[i]n reviewing whether a waiver of
prospective claims was valid, we apply ordinary contract principles‖); Warnebold v. Union Pac. R.R., 963 F.2d 222
(8th Cir. 1992)(court applied ―ordinary contract principles‖ in determining whether there was a knowing and
voluntary waiver of claims). 38
See e.g., Wastak v. Lehigh Health Network, 342 F.3d 281 (3rd Cir. 2003)(courts must inquire into the totality of
circumstances ―to determine whether the execution of a waiver was ‗knowing and voluntary‘‖); Smith v. Amedisys,
Inc., 298 F.3d 434 (5th Cir. 2002)(―[i]n determining whether a release was knowingly and voluntarily executed, this
court has adopted a ‗totality of the circumstances‘ approach‖). Even courts that apply ordinary contract principles
generally consider the circumstances surrounding the execution of the release, the clarity of the release, and whether
the employee was represented by or discouraged from consulting an attorney. See e.g., Whitmire v. WAY FM Group,
Inc., 2008 WL 5158186 (M.D. Tenn. Dec. 8, 2008)(in holding that a waiver was knowing and voluntary, a court
noted that the employee was given at least 21 days to consider the agreement, asked questions that resulted in a
revised agreement, sought advice from an attorney but disregarded it and decided to sign the agreement, had seven
days after she signed the agreement to revoke it and chose not to do so, and admitted she understood what she was
signing). 39
See e.g., Pilon v. University of Minn., 710 F.2d 466 (8th Cir. 1983)(where the employee was represented by
counsel, the release language was clear, and there was no claim of fraud or duress, the release was upheld). Waivers
that are executed by employees who were not advised to seek legal advice are more closely scrutinized than
agreements entered into by employees after consultation with an attorney. 40
See Waiver Guidance at Examples 3 and 4 citing to Hampton v. Ford Motor Company, 561 F.3d 709 (7th Cir.
2009)(waiver upheld) and Torrez v. Public Service Company of New Mexico, Inc., 908 F.2d 687 (10th Cir.
1990)(waiver invalid) but noting Cirillo v. Arco Chem. Co., 862 F.2d 448 (3rd Cir. 1988)(employee‘s waiver was
11
also addresses the EEOC position on an employer‘s inability to interfere with the filing of a
charge as a part of a release41
and the possible obligation to ―tender back‖ severance pay for a
non-ADEA claim if a claim is brought. On the charge issue, the EEOC is clear in its view that
although a severance agreement may use broad language to describe the claims that the
employee is releasing, the employee can still file a charge with the EEOC if the employee
believes that he or she was discriminated against during employment or wrongfully terminated.
The EEOC states that no agreement between an employee and the employer can limit the
employee‘s right to testify, assist, or participate in an investigation, hearing, or proceeding
conducted by the EEOC under the ADEA, Title VII, the ADA, or the EPA, and that any
provision in a waiver that attempts to waive these rights is invalid and unenforceable.42
On the ―tender-back‖ issue, the EEOC explained that ―[u]nder the ADEA, an employee is
not required to return severance pay -- or other consideration received for signing the waiver --
before bringing an age discrimination claim.‖43
Under Title VII, the ADA, or the EPA, however,
the EEOC views the law as less clear, noting that some courts have concluded ―that the validity
of the waiver cannot be challenged unless the employee returns the consideration, while other
courts apply the ADEA‘s ―no tender back‖ rule to claims brought under Title VII and other
discrimination statutes and allow employees to proceed with their claims without first returning
the consideration.‖44
The EEOC also notes that courts may reduce monetary awards in
subsequent litigation based on consideration already received.45
The EEOC next reviewed the minimum statutory elements required for a valid release of
claims under the ADEA. Unlike other discrimination claims where the validity of such releases
has largely been determined by courts, ADEA claims by statute have very specific requirements
for a release of ADEA claims to be valid. Under 29 U.S.C. Section 626(f), it is provided:
(f) Waiver
(1) An individual may not waive any right or claim under this chapter unless the
waiver is knowing and voluntary. Except as provided in paragraph (2), a waiver may
not be considered knowing and voluntary unless at a minimum—
knowing and voluntary where he was advised of equal employment laws, encouraged to consult employee relations
representative, and release specifically mentioned Title VII). 41
See Waiver Guidance at Section III, Question 3 citing its Enforcement Guidance on Non-Waivable Employee
Rights Under EEOC Enforced Statutes (April 1997)(available at http://www.eeoc.gov/policy/docs/waiver.html) and
29 C.F.R. § 1625.22(i)(2). 42
Id. 43
See Waiver Guidance at Section III, Question 5 citing Questions and Answers: Final Regulation on “Tender
Back” and Related Issues Concerning ADEA Waivers, available at www.eeoc.gov/policy/regs/tenderback-
qanda.html and also Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998) (holding that because the release failed
to comply with OWBPA, it could not bar the employee‘s ADEA claim even if the employee retained the monies she
received in exchange for the release). 44
See Waiver Guidance at Section III, Question 5 citing Blackwell v. Cole Taylor Bank, 152 F. 3rd 666 (7th Cir.
1998) (noting that employees bringing non-age claims might still have to ―tender back‖ their consideration) and
Hampton v. Ford Motor Co.., 561 F.3d 709 ( 7th Cir. 2009)(noting that because no exception to the ―tender back‖
rule exists in this Title VII case, employee must return – or least offer to return—the consideration she received
before challenging the validity of the waiver); but see Rangel v. El Paso Natural Gas Co., (holding that because the
primary purpose of the ADEA and Title VII is to make it easier for an employee to challenge discrimination,
employees bringing claims under Title VII should not have to return their severance pay before filing suit). 45
See Waiver Guidance at Section III, Question 5.
12
(A) the waiver is part of an agreement between the individual and the employer
that is written in a manner calculated to be understood by such individual, or by
the average individual eligible to participate;46
(B) the waiver specifically refers to rights or claims arising under this chapter47
;
(C) the individual does not waive rights or claims that may arise after the date the
waiver is executed;
(D) the individual waives rights or claims only in exchange for consideration in
addition to anything of value to which the individual already is entitled;
(E) the individual is advised in writing to consult with an attorney prior to
executing the agreement;48
(F) (i) the individual is given a period of at least 21 days within which to
consider the agreement; or
(ii) if a waiver is requested in connection with an exit incentive or other
employment termination program offered to a group or class of
employees, the individual is given a period of at least 45 days within
which to consider the agreement;49
(G) the agreement provides that for a period of at least 7 days following the
execution of such agreement, the individual may revoke the agreement, and the
agreement shall not become effective or enforceable until the revocation period
has expired;
46
On this point, the Waiver Guidance at footnote 17 cites to Thormforde v. International Business Machines Corp.,
406 F.3d 500 (8th Cir. 1999) as an example of a release not upheld on this point and also Syverson v. IBM, 472 F.
3rd 1072 (9th Cir. 2007) (court adopted the reasoning in Thormforde when finding the same waiver used under
different circumstances invalid). 47
EEOC regulations specifically state that an OWBPA waiver must expressly spell out the Age Discrimination in
Employment Act (ADEA) by name. See 29 C.F.R. §1625.22(a)(6). 48
On this point, the Waiver Guidance at footnote 18 cites to American Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d
111 (1st Cir. 1998) (to “advise” employees to consult an attorney means affirmatively to “caution,” “warn,” or
“recommend”). 49
The Waiver Guidance notes that the EEOC ―regulations clarify that the 21-day consideration period runs from the
date of the employer‘s final offer‖, and also that if ―material changes to the final offer are made, the 21-day period
starts over.‖ See Waiver Guidance at Section IV, Question 6 and footnote 19. Moreover, the EEOC, citing 29
C.F.R. §1625.22 (e)(6), states that ―[a]n agreement can be signed prior to the 21- (or 45- ) day time period as long as
employee‘s decision is knowing and voluntary and is not induced by the employer through fraud, misrepresentation,
a threat to withdraw or alter the offer prior to the expiration of the 21- or 45-day time period, or by providing
different terms to employees who sign the release prior to the expiration of such time period. Id. Courts have not
always taken so stringent an approach. See, e.g., Gomez v. AlliedSignal, Inc., 172 F.3d 62 (10th Cir. 1999), appeal
after remand, 229 F.3d 1163, 2000 WL 1227761 (10th Cir. 2000) (employee not entitled to OWBPA's 21-day
evaluation period when he agrees to settle federal age discrimination claims during pretrial conference supervised by
judge).
13
(H) if a waiver is requested in connection with an exit incentive or other
employment termination program offered to a group or class of employees, the
employer (at the commencement of the period specified in subparagraph (F))
informs the individual in writing in a manner calculated to be understood by the
average individual eligible to participate, as to—
(i) any class, unit, or group of individuals covered by such program, any
eligibility factors for such program, and any time limits applicable to such
program; and
(ii) the job titles and ages of all individuals eligible or selected for the
program, and the ages of all individuals in the same job classification or
organizational unit who are not eligible or selected for the program.
(2) A waiver in settlement of a charge filed with the Equal Employment Opportunity
Commission, or an action filed in court by the individual or the individual‘s
representative, alleging age discrimination of a kind prohibited under section 623 or
633a of this title [section 4 or 15] may not be considered knowing and voluntary
unless at a minimum—
(A) subparagraphs (A) through (E) of paragraph (1) have been met; and
(B) the individual is given a reasonable period of time within which to consider
the settlement agreement.
(3) In any dispute that may arise over whether any of the requirements, conditions,
and circumstances set forth in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H) of
paragraph (1), or subparagraph (A) or (B) of paragraph (2), have been met, the party
asserting the validity of a waiver shall have the burden of proving in a court of
competent jurisdiction that a waiver was knowing and voluntary pursuant to
paragraph (1) or (2).
(4) No waiver agreement may affect the Commission‘s rights and responsibilities to
enforce this chapter. No waiver may be used to justify interfering with the protected
right of an employee to file a charge or participate in an investigation or proceeding
conducted by the Commission.
So what happens if you do not meet the OWBPA requirements? The Waiver Guidance
takes the position that the release is invalid and unenforceable, but goes on to explain further that
several courts have held that violation of OWBPA does not itself create a separate cause of
action.50
The Waiver Guidance also points out other reasons a release may be invalid, such as
50
See Waiver Guidance at Section IV, Question 6 and footnote 21 citing ―EEOC v. Sara Lee Corp., 883 F. Supp.
211 (N.D. Ill. 1995); Williams v. General Motors Corp., 901 F. Supp. 252 (E.D. Mich. 1995); but see
Commonwealth of Massachusetts v. Bull HN Information Sys. Inc., 16 F. Supp. 2d 90 (D. Mass. 1998)(holding that
an invalid waiver can be an independent cause of action under the ADEA); in a subsequent proceeding,
Commonwealth of Massachusetts v. Bull HN Information Sys. Inc., 143 F. Supp. 2d 134 (D. Mass. 2001), the court
clarified that although employees can bring a suit challenging a violation of OWBPA requirements, they cannot
recover damages absent proof of age discrimination.‖
14
fraud, duress, or mutual mistake.51
The Waiver Guidance concludes with both a checklist for
employees, titled What to Do When Your Employer Offers You a Severance Agreement and a
sample waiver form.52
So what‘s missing from this discussion? As helpful as this Waiver Guidance may seem,
readers should remember that it is limited in scope, covering only those laws the EEOC is
charged with enforcing (Title VII, ADEA, ADA, EPA, etc…). A key point to remember is that a
myriad of other employment laws exist (both federal and state), and the requirements can differ.
One such example is claims under the Fair Labor Standards Act. Unlike the case law on
Title VII, FLSA claims are not always deemed to be capable of waiver without DOL or court
supervision.53
The Family and Medical Leave Act case law on releases was initially mixed54
, but
the 2009 regulatory amendments to the FMLA, effective on January 16, 2009, clarified this issue
and specifically allows for the release of retrospective FMLA claims.55
For those employers
subject to ERISA, ERISA claims can be waived, but care must be taken to do so correctly. At
least one court has held that ERISA preempts state law on the issue of release validity.56
Employers must also be cautious not to inadvertently create an ERISA plan when structuring a
severance program unless one is desired.57
Finally, some state laws may have their own
51
See Waiver Guidance at Section IV, Question 7. 52
See Waiver Guidance at Appendices A and B. 53
Historically, disputes over FLSA coverage may not be compromised without Department of Labor involvement.
See, e.g., D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946); Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697 (1945). Cf.,
Allen v. SunTrust Banks, Inc., 549 F. Supp. 2d 1379 (N.D. Ga. 2008) (temporary restraining order prohibiting
employer from requiring employees to waive FLSA claims as condition of receiving severance benefits package
offered in connection with RIF); but see Martinez v. Bohls Bearing Equip. Co., 361 F.Supp.2d 608 (W.D.Tex.2005)
(reviewed text and legislative history of the FLSA, as well as various precedents regarding settlements of FLSA
claims, and concluded that private release signed by an employee waiving his rights under the FLSA was valid and
enforceable). Bona fide disputes over hours may be compromised. See, e.g., Strand v. Garden Valley Tel. Co., 51 F.
Supp. 898 (D. Minn. 1943). See also, Coventry v. U.S. Steel Corp., 856 F.2d 514, 521-22 (3rd Cir. 1988) (discussing
FLSA exception to general recognition of waivers and comparing it with employee's ability to waive rights under
ADEA). Also, this principle on waivers has been called into question in recent years. See, e.g., Bonetti v. Embarq
Management Company, 2009 WL 2371407 (M.D.Fla. 2009). 54
Compare Taylor v. Progress Energy, Inc., 415 F.3d 364 (4th Cir. 2005) (concluding that waiver of FMLA claims
was prohibited without DOL or court approval.) with Faris v. Williams WPC-I, Inc., 332 F.3d 316 (5th Cir. 2003)
(concluding that retroactive waivers of FMLA waivers were enforceable without court or DOL approval). 55
See 29 C.F.R. §825.220. 56
See, e.g., Tobin v. Ravenswood Aluminum Corp., 838 F. Supp. 262 (S.D. W. Va. 1993)( ERISA preempts state
contract law with respect to a release obtained in exchange for severance benefits); but see, Lynn v. CSX Transp.,
Inc., 84 F.3rd 970 (7th Cir. 1996) (ERISA's non-alienation provisions allowed employee to bring statutory claim that
his pension was improperly calculated under terms of employer's retirement plan despite his having signed form
release at termination pledging not to sue employer). 57
Compare Kolkowski v. Goodrich Corp., 448 F.3d 843 (6th Cir. 2006) (severance plan can be subject to ERISA if
the employer has discretion over the distribution of benefits, and there are ongoing demands on an employer's
assets) and Schonholz v. Long Island Jewish Medical Center, 87 F.3d 72 (2d Cir. 1996)(arrangement that required
managerial discretion and separate analysis of certain criteria to determine whether an employee was involuntarily
terminated, and thus qualified for the severance benefits, constituted an ERISA plan) with Fort Halifax Packing Co.
v. Coyne, 482 U.S. 1 (1987) (severance arrangement that only requires a "one-time lump sum payment triggered by
a single event" (such as RIF) does not create an ongoing administrative scheme) and James v. Fleet/Norstar
Financial Group, Inc., 992 F.2d 463 (2d Cir. 1993) (employer's decision to give employees sixty days additional pay
following their last day of work if such employees stayed on the job until an internal restructuring was completed
was not an ERISA plan). See also, Signorille, Mary Ellen, Responding to Economic Crises: Plant Closings, RIFs,
Layoffs And Bankruptcy, ABA Section of Labor and Employment Law 2nd Annual CLE Conference (9/12/08),
available at http://www.abanet.org/labor/lel-annualcle/08/materials/start.htm (last accessed 1/30/10).
15
restrictions.58
G. COBRA Subsidy
Mention must at least be made of the COBRA subsidy enacted last year and extended
through February as questions will undoubtedly arise in any layoff. The American Recovery and
Reinvestment Act of 2009 (ARRA),59
as amended by the Department of Defense Appropriations
Act for 201060
provides for premium reductions for health benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA). Under these laws, eligible individuals
pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to
the coverage provider through a tax credit. To qualify, individuals must experience a COBRA
qualifying event that is due to the involuntary termination of a covered employee's employment.
The involuntary termination must occur during the period that began September 1, 2008 and will
end on February 28, 2010. The premium reduction applies to periods of health coverage that
began on or after February 17, 2009 and lasts for up to 15 months.
Both the IRS and the Department of Labor have been active in publishing notices and
materials related to the subsidy, among them an IRS Notice on the details,61
IRS Q&A on the
subsidy,62
DOL Model Notices,63
and various fact sheets on the subsidy.64
Institutions should be
familiar with the new subsidy.
II. Unintended Fall-out during Difficult Times
Even at the best of times, the Fair Labor Standards Act (FLSA) is tedious and difficult.
In the context of an uncertain economy, an employer‘s desire to control costs, and an employee‘s
inevitable wish to remain employed, an interesting dynamic can develop. The employer is doing
more with less, additional responsibilities fall to those who remain, and in the midst of all of this,
technology has enabled the 24/7 workplace. In this section, we will address the FLSA
implications to college and university furlough plans and the litigation trend over non-
compensated work after hours using technology like cell phones and PDAs. We will close with
a discussion of the Employee Free Choice Act because fears over job security can often lead to
an organizing effort.
A. Furloughs and the FLSA
On the issue of furloughs, the Department of Labor (DOL) has issued a set of FAQs
designed to assist employers in properly applying its regulations.65
Furloughs for non-exempt
workers and in the absence of state law or collective bargaining restrictions are generally not
problematic from a FLSA standpoint. Employers simply must understand the distinctions
58
See, e.g., Section 443.041(1), Florida Statutes (waiver of unemployment rights void). 59
Pub.L. 111-5 (2/17/09). 60
Pub.L. 111-118 (12/19/09). 61
See IRS Notice 2009-27, available at http://www.irs.gov/pub/irs-drop/n-09-27.pdf (last accessed 2/1/10). 62
See COBRA: Questions and Answers for Employers, available at
http://www.irs.gov/newsroom/article/0,,id=204708,00.html (last accessed 2/1/10). 63
Available at http://www.dol.gov/ebsa/COBRAmodelnotice.html (last accessed 2/1/10). 64
See, generally, http://www.dol.gov/ebsa/cobra.html (last accessed 2/1/10). 65
See Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues
(July 2009), available at http://www.dol.gov/WHD/flsa/FurloughFAQ.pdf (last accessed 1/30/10).
16
between ―engaged to wait‖ and ―waiting to be engaged‖ and not overly restrict the furlough time
of these employees so as to convert non-work time into compensable time.66
It is slightly more difficult in the area of exempt of exempt employees paid on a ―salaried
basis‖. DOL regulations preclude a variety of deductions from an employee‘s predetermined
pay.67
Within that basic rubric, and again assuming no state law or collective bargaining
restrictions, the specific rules relating to furlough differ depending on the employer‘s status as
public or private. Moreover, different rules apply to the classes of lawyers, doctors and teachers,
which are not subject to the salary basis test.
For those subject to the ―salaried basis‖ test, the general rule is that the employee is
required to pay the employee the full predetermined salary for any week in which the employee
performs any work without regard to the number of days or hours. This makes furloughs
particularly difficult to manage give the ability of exempt employees to continue working
remotely through computer access and PDAs.68
The employer is not obligated to pay for work
weeks when no work is performed. This general rule is also different if the employer is a public
employer. In that case, a special regulation under 29 C.F.R. §541.710 allows for pay deductions
due to a budget-required furlough, but it disqualifies the employee from the overtime exemption
for that week. The employer in theory can also reduce pay. For hourly staff, and in the absence
of state or federal minimum wage law as or other restrictions, this is typically not legally
problematic. For salaried employees, DOL takes a more restrictive view, permitting such
changes when not based on quantity or quality of work but only where bona fide and not used a
device to evade the FLSA.69
Teachers, lawyers and doctors fall into a slightly different class in that these occupations
do not have a ―salary basis‖ requirement. To qualify as a teacher who is exempt from receiving
overtime pay, DOL simply requires simply that an employee have ―teaching‖ as a primary job
duty and that the employee be employed by an educational establishment.70
Deductions from
salary will not disqualify these classes from the exemption. For those considering furlough plans
as a cost-cutting measure, familiarity with these limitations is crucial for compliance.
B. Technology and the FLSA
Of greater concern than furloughs are the dynamics created by institutions implementing
layoffs and the stress and fear this can create in employees. Not surprisingly, those that remain
may wish to ―prove their worth‖, hoping to avoid being selected for reduction. This diligence
can lead to the ―curse of the overly-dedicated‖, a dynamic already present at many institutions
66
Id. at Question 8. 67
See DOL Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor
Standards Act (FLSA) (July 2008), available at http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.pdf
(last accessed 1/30/10). 68
See, e.g., Swanton, Mary, Time Out: How should in-house attorneys handle the proliferation of furlough
programs, Inside Counsel (August 2009), available at http://www.insidecounsel.com/Issues/2009/August-
2009/Pages/Time-Out.aspx (last accessed 2/1/10). 69
See Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues
(July 2009) at Question 7, available at http://www.dol.gov/WHD/flsa/FurloughFAQ.pdf (last accessed 1/30/10). 70
See 29 C.F.R. § 541.303. It is not always a given that an individual with an instructor title will qualify. See, e.g.,
Astor v. U.S., 79 Fed. Cl. 303 (2007)(firearms instructors not entitled to exemption both because not employed by
educational establishment and because ―teaching‖ not considered primary duty).
17
simply by virtue of the industry and type of people who gravitate toward education. Risks come
with this phenomenon.
A 2008 study by the Pew Research Center‘s Internet and American Life Project,
Networked Workers71
, shares some interesting statistics on the use of technology by employees.
According to the Pew Report, individuals considered to be ―Networked Workers‖ (i.e., those that
use the internet or email at work):
93% own a cell phone (compared with 78% of all American adults)
85% own a desktop computer (compared with 65% of all adults)
61% own a laptop (compared with 39% of all adults)
27% own an PDA (compared with 13% of all adults)
From this, the Pew Report also states that 45% of employed respondents in the survey
sample reported at least some work from home. While the number that work at home daily or
almost every day was only 18%, the percentage of employed Americans working from home as
often as a few times per month was 37%. Not surprisingly, for ―Networked Workers‖ had a
much higher rate of reported work, with 56% reporting some at-home work and 20% working
from home daily or almost every day.
The Pew Report also examined result from those the study labeled as ―Wired and Ready
Workers‖, with the term referring to the ―96% of employed adults who are in some way making
use of new technologies—either by going online, using email, or owning a cell phone.‖72
In
some respects, these results are positive, with 80% saying these technologies have improved
their ability to do their job, 73% stating these technologies have improved their ability to share
ideas with co-workers, and 58% saying these tools have allowed them more flexibility in the
hours they work.73
It was not all good news though. The Wired and Ready Workers also
reported these technologies increase demands that they work more hours (46%), increase the
level of stress (49%), and make it harder to disconnect from their work at home and on the week-
ends (49%).74
Indeed, one in five email users and half of the PDA owners say they are required
to read and respond to work-related emails when not at work.75
So what does this have to with employment law? No one will really dispute that
technology is a marvel that can greatly improve efficiency and productivity. It is not without
challenges, however, and exposure to various forms of liability associated with the use of
technology continues to surface. With cellular phones, for example, one might have thought that
the only issues facing colleges and universities were the risks associated with cell phone
taxation76
and the possible liability associated when employees text or talk on the phone and
71
Available at http://www.pewinternet.org/Reports/2008/Networked-Workers.aspx (last accessed 1/30/10). 72
Id. at p.iii. 73
Id. 74
Id. 75
Id. at p.v. 76
By way of example, see the Baylor University web page (http://www.baylor.edu/tax/index.php?id=38399)
detailing tax consequences of cell phone usage and its approach to compliance. As of this writing, NACUBO
reported on January 15, 2010, that the IRS has dropped its plan, announced in June 2009 in IRS Notice 2009-46
(available at http://www.irs.gov/irb/2009-23_IRB/ar07.html), to issue simplifying regulations for cell phone
accounting in anticipation of possible passage of H.R. 690/S. 144, titled the ―Modernize Our Bookkeeping in the
Law for Employees (MOBILE) Cell Phone Act of 2009‖. The bill is available at http://thomas.loc.gov/cgi-
18
drive.77
The most recent iteration of possible liability, wage and hour consequences of off-duty
work performed on employer-issued electronic devices, is now the latest round. While reports
are just beginning to surface, the issue is significant and one employers need to take seriously.
Recent media reports have chronicled the filing of several lawsuits by employees seeking
compensation for time spent away from work performing work-related functions on employer-
provided equipment.78
Indeed, the legal community was abuzz when the suit against T-Mobile
was filed last year.79
The suit, styled Agui, et al v. T-Mobile, et al80
, alleges that non-exempt
retail sales associates and supervisors were issued T-Mobile smartphones and were required to
review and respond to numerous T-Mobile-related e-mails and text messages both day and night,
whether or not they were logged into T-Mobile's computer-based timekeeping system.81
In
another suit filed in March 2009, a former CB Richard Ellis Group Inc. maintenance worker
seeks pay for time spent after hours receiving and responding to messages on a work-issued cell
phone.82
It can‘t really be said that this issue should be a complete surprise. The issue surfaced in
2007 in an article published in the New York Law Journal.83
In 2008, articles in the New York
Times Media Talk and USA Today at least hinted at the issue when reporting on a dispute
between ABC and several of its news writers over Blackberries and time spent after normal
bin/query/z?c111:H.R.690.IH (last accessed 1/30/10): For additional detail on this issue, see NACUBO‘s comments
in response to the IRS Notice, available at
http://www.nacubo.org/Documents/BusinessPolicyAreas/NACUBOCommentletter2009-46.pdf (last accessed
1/30/10). 77
See, e.g. Bekish, Ashlee and Nolan, Dayle,, Employer Liability for Employee Cell Phone Use, available at
http://www.martindale.com/personal-injury-law/article_Larkin-Hoffman-Daly-Lindgren-Ltd_892478.htm (last
accessed 1/30/10) and Corporate Cell Phone Policies, posted online by CellPhoneSafety.org, a site created by the
National Consumer Advocacy Commission and available at
http://www.cellphonesafety.org/regulation/corporate.htm (last accessed 1/30/10),. 78
See, e.g., Sanserino, Michael, Lawsuits Question After-Hours Demands of Email and Cellphones, Wall Street
Journal (8/10/09), available at http://online.wsj.com/article/SB124986371466018299.html (last accessed 1/30/10);
Lawsuit: Overtime pay for after-hours cell calls, emails, Oregon Business Report (8/13/09), available at
http://oregonbusinessreport.com/2009/08/lawsuit-overtime-pay-for-after-hours-cell-calls-emails/ (last accessed
1/30/10). 79
See Baldas, Tresa T-Mobile Suit Puts Legal Price on Wireless, The National Law Journal (7/20/09), available at
http://www.law.com/jsp/article.jsp?id=1202432364897&rss=newswire last accessed 1/30/10); Bernstein, Steven,
PDA After Hours, Fisher & Phillips Labor Letter (December 2009), available at http://www.martindale.com/labor-
employment-law/article_Fisher-Phillips-LLP_862478.htm (last accessed 1/30/10); Hidden Costs: Non-Exempt
Employees’ Class Action Complaints for Time Spent on Work-Related Messages, Jackson Lewis (10/20/09),
available at http://www.jacksonlewis.com/legalupdates/article.cfm?aid=1884 (last accessed 1/30/10). 80
Case No. 1:2009 cv 02955 (E.D.N.Y. July 10, 2009), available at
http://www.wcsr.com/resources/pdfs/flsa072109.pdf (last accessed 1/30/10). 81
Among the allegations in the Agui Complaint are claims that these non-exempt employees were required to
perform work in advance of ―clocking in‖ to the time keeping system, working after their shift after logging out,
given company Blackberries or other smart devices and required to respond to T-Mobile related emails and text
messages at all time, whether clocked in or not, take and place calls, and participate in business conference calls
outside their normal 40-hour week without pay. Agui Complaint at ¶ ¶ 29-30. None of this extra work when not
clocked into the T-Mobile time system was paid, and the complaint alleges that when the plaintiffs complained to
store managers, they were told nothing could be done and they would just have to accept working the extra hours as
part of T-Mobile‘s standard business practices. Agui Complaint at ¶ 31. 82
See John Rulli v. CB Richard Ellis Group, Case No. 2:2009 cv 00289 (E.D. Wis., Mar. 13, 2009). 83
See Schlossberg, Jeffrey M. and Malerba, Kimberly B., Tech-Tock—Are employees who check devices off hours
entitled to overtime pay?, New York Law Journal (5/2107), available at
http://online.wsj.com/public/resources/documents/TechTock.pdf?mod=WSJBlog (last accessed 1/30/10).
19
hours working. According to the reports, three writers refused to sign waivers indicating they
would not be paid for after-hours work checking their Blackberries.84
Media reports also
suggested Verizon was sued on this same issue.85
So what happens from here? First, to the extent litigation is brought where the employer
claims that the employee is exempt from overtime requirements, it stops there if the employer is
correct.86
Not always an easy task since the burden of proving exempt status falls to the
employer and misclassification of workers as exempt can easily happen.87
If the employees are not exempt, employers must realize the standard for determine what
is compensable time is broad. The determination of what is compensable time is under the
liberal standard of ―suffer or permit to work,‖ with the DOL regulations cautioning that "[w]ork
not requested but suffered or permitted is work time."88
As a general rule, the employer must
know or have reason to believe that an individual is performing work on its behalf, or the work
performed is not within the purview of an employer/employee relationship.89
The employer does
carry a duty of reasonable inquiry, though, given the conditions prevailing in its business, to
determine if work is performed on its behalf.90
The two most likely defenses employer will raise will be an assertion that the work was
de minimis, or alternatively, that ―rounding‖ practices provide a defense. The de minimis
defense developed under Anderson v. Mt. Clemens Pottery Co.91
, and basically provides that de
minimis time worked beyond an employee‘s regular schedule can be disregarded for purposes of
pay obligations to the employee. If only it were so simple. Litigation over what constitutes de
minimis time is contentious and courts have not always agreed.92
―In recording working time
under the Act, insubstantial or insignificant time beyond the scheduled working hours, which
cannot as a practical administrative matter be precisely recorded for payroll purposes, may be
84
See Stelter, Brian, ABC and Writers Skirmish Over After-Hours E-Mail, The New York Time (6/23/08), available
at http://www.nytimes.com/2008/06/23/business/media/23abc.html (last accessed 1/30/10); Wulfhorst, Ellen,
BlackBerries, blogs create overtime work disputes, USA Today (6/25/08), available at
http://www.usatoday.com/tech/products/2008-06-25-blackberry-blogs-overtime-pay_N.htm (last accessed 1/30/10). 85
See, e.g., Buckley & Klein, BlackBerry Overtime (2/11/09), available at
http://www.overtimelawyerblog.com/2009/02/blackberry_overtime.html
(last accessed 1/30/10); Goodman, Michelle, Overtime Pay for E-mails? Debate Grows, ABC News Column
(8/20/09), available at http://abcnews.go.com/Business/overtime-pay-mails-lawsuits-
continue/story?id=8366893&page=3 (last accessed 1/30/10). 86
Exempt status is important because the FLSA‘s rules for minimum wage and overtime do not apply to ―any
employee employed in a bona fide executive, administrative, or professional capacity.‖ See 29 U.S.C. § 213(a)(1).
Each of these exemptions is dependent on an analysis of that employee‘s actual role in the organization, not the title
assigned to an employee. See 29 C.F.R. § 541.2. 87
See, e.g., Susan E. McPherson and Matthew D. Fridy, Fair Pay Exemptions for You and Your Client, 66 Ala. Law.
269 (2005). 88
See 29 U.S.C. §203(g); 29 C.F.R. §785.11. 89
See, e.g., Burry v. Nat'l Trailer Convoy, Inc., 338 F.2d 422 (6th Cir. 1964)(wife of employee permitted to work in
terminal of company transporting house trailers and mobile homes when husband was absent from terminal office
and trained by company was employee where company, with knowledge, permitted wife to work in terminal). 90
See, e.g., Gulf King Shrimp Co. v. Wirtz, 407 F.2d 508 (5th Cir. 1969)(using standard of knew or had opportunity
through reasonable diligence to acquire knowledge in determining employer liable for illegally employing minors). 91
328 U.S. 680 (1946). 92
Compare Carlsen v. United States, 521 F. 3rd
1371 (Fed.Cir.2008)(suggesting 10 minutes a de minimis cutoff)
with Rutti v. LoJack Corp., 578 F.3d 1084 (9th
Cir. 2009)(using three-part test to determine de minimis).
20
disregarded.‖93
Note that the rule applies only when uncertain and indefinite periods of time of a
few seconds or minutes duration are involved, and where the failure to count such time is due to
considerations justified by industry realities.94
An employer may not arbitrarily fail to count as
hours worked any part, however small, of the employee‘s fixed or regular working time, or any
practically ascertainable period of time the employee is regularly required to spend on duties he
or she is assigned.95
Rounding may also be a defense. The practice of rounding, codified in DOL regulations,
permits employers to compute work time by recording the employee‘s starting and ending time
to the nearest quarter hour, so long as over time the practice will not fail to properly compensate
the employee.96
What this means is that it all must more or less average out; a rounding practice
that only rounds in favor of the employer is not permitted.
In light of this development, managers and supervisors should, in the first instance, think
hard about who are given company phones and PDAs. If it is a non-exempt employee, ask
yourself why you are giving the device other than to have the employee work when away from
the work site. If you conclude that legitimate reasons exist to issue the device, review your
policies. Most employers have a policy prohibiting employees from working extra without
proper authorization, but are you enforcing it? Receiving emails throughout the week-end from
a non-exempt employee is a sign the employee is working and could be sufficient to put the
employer on notice. Consider also whether you have an adequate and effectively communicated
method for employees to report additional work after hours. This is sometimes problematic for
employees who use an electronic time recording systems that an employee can access only while
physically at work.
By the way, a word about such time-recording systems: to the extent they use an ―auto-
deduct‖ feature to deduct meal periods, that is now another new wave of FLSA litigation
beginning to make the rounds.97
Also of concern is recent litigation working its way through the
court over the status of certain undergraduate students as ―employees‖ subject to the FLSA while
employed as Conference Assistants at Illinois State University.98
C. Employee Free Choice Act of 2009
The Employee Free Choice Act (―EFCA‖) H.R. 1409, S. 56099
was first introduced in
2007.100
It was not passed at that time, but was re-introduced in 2009, and remains a top priority
for organized labor. In summary, the bill would amend the National Labor Relations Act (the
―Act‖) as follows:
93
See 29 C.F.R. § 785.47. 94
Id 95
Id. 96
See 29 C.F.R. §§ 785.48. 97
Smith, Allen, Automatic Meal Break Deductions Targeted in Spate of Lawsuits, Society of Human Resource
Management (1/19/10), available at http://www.shrm.org/LegalIssues/FederalResources/Pages/Autodeducts.aspx
(last accessed 1/31/10). 98
See North v. Board of Trustees of Illinois State University, 2009 WL 3769907 (C.D.IL 2009)(denying motion to
dismiss and allowing notice to possible class members). 99
Available on THOMAS, the Library of Congress portal for legislative information, at http://thomas.loc.gov/ 100
The Employee Free Choice Act of 2007, H.R. 800, S. 1041(110th
Congress). The 2007 version failed to pass
when senators who oppose the bill voted against ―cloture,‖ preventing a vote on the bill.
21
Section 2 would require the Board to certify a bargaining representative without
directing an election if a majority of the bargaining unit employees have authorized
designation of the representative (card-check) and no other individual or labor
organization is currently certified or recognized as the exclusive representative of any
of the employees in the unit101
;
Section 3 would establish special procedural requirements for reaching an initial
collective bargaining agreement following certification or recognition, including the
time period during which bargaining must commence102
and optional mediation103
and mandatory arbitration of initial contract disputes104
;
Section 4 would revise enforcement requirements with respect to unfair labor
practices during union organizing drives, particularly a preliminary investigation of
an alleged unfair labor practice which may lead to proceedings for injunctive relief;
and require that priority be given to a preliminary investigation of any charge that,
while employees were seeking representation by a labor organization, or during the
period after a labor organization was recognized as a representative until the first
collective bargaining contract is entered into, an employer: (1) discharged or
otherwise discriminated against an employee to encourage or discourage membership
in the labor organization; (2) threatened to discharge or to otherwise discriminate
against an employee in order to interfere with, restrain, or coerce employees in the
exercise of guaranteed self-organization or collective bargaining rights; or (3)
engaged in any other related unfair labor practice that significantly interferes with,
restrains, or coerces employees in the exercise of such guaranteed rights; and
101
Section 2 of H.R. 1409 would amend Section 9(c) of the NLRA to accomplish this, and also require that the
Board develop guidelines and procedures for the designation by employees of a bargaining representative, including
model collective bargaining authorization language that may be used for purposes of making the designations, and
procedures to be used by the Board to establish the validity of signed authorizations designating bargaining
representatives. 102
Under Section 3 of H.R. 1409, Section 8 of the National Labor Relations Act would be amended by adding
language requiring that whenever bargaining is for the purpose of establishing an initial agreement following
certification or recognition, bargaining must start not later than 10 days (or within such further period as the parties
agree upon) after receiving a written request for bargaining from the newly organized or certified representative.
The parties must ―meet and commence to bargain collectively‖ and ―make every reasonable effort to conclude and
sign a collective bargaining agreement.‖ 103
Section 8 of the National Labor Relations Act would be amended to provide that ―[i]f after the expiration of the
90-day period beginning on the date on which bargaining is commenced, or such additional period as the parties
may agree upon, the parties have failed to reach an agreement, either party may notify the Federal Mediation and
Conciliation Service of the existence of a dispute and request mediation. Whenever such a request is received, it
shall be the duty of the Service promptly to put itself in communication with the parties and to use its best efforts, by
mediation and conciliation, to bring them to agreement.‖ 104
Also under Section 3, if after the expiration of the 30-day period beginning when mediation is requested, or such
additional period as the parties may agree upon, FMCS is not able to bring the parties to agreement by conciliation,
FMCS will refer the dispute to an arbitration board (detailed to be determined by regulations). The arbitration panel
shall render a decision settling the dispute, and such decision will be binding upon the parties for a period of 2 years,
unless amended during such period by written consent of the parties.‖
22
Section 4 would also add to remedies for such violations including back pay plus
liquidated damages; and additional civil penalties for certain willful repeat
violations.105
By its terms, it seems simple, but the implications are significant. To say labor and
management were polarized on this issue when the EFCA was first proposed is to put it mildly.
At that time and still today, the AFL-CIO characterizes the EFCA as enabling ―working people
to bargain for better wages, benefits and working conditions by restoring workers‘ freedom to
choose for themselves whether to join a union.‖106
The passage of time between the initial effort
to pass the EFCA in 2007 and its re-introduction in 2009 has only strengthened the resolve of the
unions and garnered even stronger opposition from employers.
According to one recent report, AFL-CIO President Richard Trumka optimistically
expects the EFCA to pass within the first few months of 2010.107
Others are not so sure.108
In
2009, reports emerged that a possible compromise was in the offing that would drop the card-
check feature from the bill, leaving the other provisions.109
Whether true or not, these statements
likely prompted the U.S. Chamber, as part of its Employee Free Choice Act Toolkit110
, to publish
Beware of False Compromises on Card Check111
criticizing the purported compromises.
The more recent debate has focused not on possible compromise, but rather on the
possibility that if the National Labor Relations Board becomes sufficiently pro-union (and
especially if Craig Becker, an associate general counsel to both the Service Employees
International Union (SEIU) and the AFL-CIO, is confirmed), some aspects of the EFCA may
105
See Section 4 of H.R. 1409, available on THOMAS, the Library of Congress portal for legislative information, at
http://thomas.loc.gov/ (last accessed 1/26/20). 106
See http://www.aflcio.org/joinaunion/voiceatwork/efca/whatis.cfm (last accessed 1/26/10). For a more detailed
look at the perceived failings of the current process and why the EFCA would effectuate the NLRA, see The
Facts Union Representation and the NLRA (December 2008), available at
http://www.aflcio.org/joinaunion/voiceatwork/efca/upload/efcareport_1208.pdf (last accessed 1/26/10). The
opposing view is detailed in a new U.S. Chamber briefing book, The Employee Free Choice Act Piercing the
Rhetoric (2009), available at http://www.uschamber.com/publications/reports/0906efca.htm (last accessed 1/26/10). 107
See Mooney, Kevin, AFL-CIO’s Trumka Says Employee Free Choice Act Will Pass This Year, The American
Spectator, AmSpecBlog (posted 1/13/10), available at http://spectator.org/blog/2010/01/13/afl-cios-trumka-says-
employee/print (last accessed 1/26/10). 108
See, e.g., Schuman, Ilyse, Union Leader Predicts EFCA Passage in First Quarter of 2010, Washington DC
Employment Law Update (Littler Mendelson, 1/12/10), available at
http://www.dcemploymentlawupdate.com/2010/01/articles/efca-1/union-leader-predicts-efca-passage-in-first-
quarter-of-2010/ (last accessed 1/26/10); EFCA Update: Compromise, Delay and Uncertainty, EFCA Newswire,
Baker Hostetler (9/23/09), available at http://www.efcanewswire.com/component/content/article/21-efca-update-
compromise-delay-and-uncertainty (last accessed 1/26/10); 109
See, e.g., HR Hero Alerts , Specter Reveals Possible EFCA Compromise, The Employment Law Post (9/16/09),
available at http://employmentlawpost.com/hrnews/2009/09/16/specter-reveals-possible-efca-compromise/ (last
accessed 1/26/10); Greenhouse, Steve, Democrats Drop Key Part of Bill to Assist Unions, New York Times
(7/16/09),
http://www.nytimes.com/2009/07/17/business/17union.html?_r=2 (last accessed 1/26/10); Wolgemuth, Liz,
Employee Free Choice Without Card Check: "Card Check Lite?", U.S. News & World report (The Inside Job
column) (7/17/09), available at http://www.usnews.com/money/blogs/the-inside-job/2009/07/17/employee-free-
choice-without-card-check-card-check-lite-.html (last accessed 1/26/10). 110
Available at http://www.uschamber.com/chambers/efca_gr_toolkit.htm (last accessed 1/26/10). 111
Available at http://www.uschamber.com/wfi/beware.htm (last accessed 1/26/10).
23
occur regardless of the bill‘s passage.112
Specifically, and likely in part as a result of comments
by William Gould, a former chair of the Board113
, the latest commentators are focusing on the
possibility that the Board, through rule-making and its administrative authority, could
administratively to shorten the time period for processing representation elections, broaden the
application of Gissel orders114
, try to impose additional penalties upon employers for unfair labor
practices, and try to expedite bargaining through its interpretation of the duty to bargain in good
faith.115
That may not be all. Labor and management alike are also watching for the outcome of a
new law in Oregon that would allow employees to opt out of certain mandatory meetings,
including ones about unions.116
The new Worker Freedom Act has already been challenged in
court.117
No doubt more will come in the months ahead on this important issue.
Conclusion
A down economy can cause institutions to re-think and re-focus priorities in the face of
shrinking resources. These efforts can implicate the existing framework of laws institutions must
navigate through to the end. Caution and diligence in both current compliance and in adapting to
new and emerging liability theories is essential to success.
The views expressed herein are those of the author only. The information contained in these
materials is intended as an informational report on legal issues and developments of general
interest. It is not intended to provide a complete analysis or discussion of each subject covered.
Applicability to a particular situation depends upon an investigation of the specific facts and
more exhaustive study of applicable law than can be provided in this format.
112
See, e.g., Bogardus , Kevin, Nominee to Labor board heats up card-check fight, The Hill (1/25/10)available at
http://thehill.com/business-a-lobbying/77909-labor-board-nominee-heats-up-card-check-fight , last accessed
1/26/10). 113
See, e.g., Schoeff, Jr., Mark, NLRB Decisions Could Make Card Check a Reality, Workforce Management Online
(July 2009), available at http://www.workforce.com/section/03/feature/26/52/97/265299.html (last accessed
1/26/10). 114
Under NLRB v. Gissel Packing Co. 395 U.S. 575 (1969), the Board can impose a duty to bargain on an employer
despite a union loss in a Board certified election. The Board created this remedy to address situations where the
union has received a majority of valid authorization cards, and the employer‘s unfair labor practices are so pervasive
that there is little or no possibility of holding a fair election at any point in the immediate future. 115
See, e.g., Spencer, Glenn, Two Tracks for EFCA in 2010, The Metropolitan Corporate Counsel (Hot Issues Alert,
December 2009), available at http://www.metrocorpcounsel.com/pdf/2009/December/13.pdf (last accessed
1/26/10); EFCA Update: Compromise, Delay and Uncertainty, EFCA Newswire, Baker Hostetler (9/23/09),
available at http://www.efcanewswire.com/component/content/article/21-efca-update-compromise-delay-and-
uncertainty (last accessed 1/26/10); U.S. Chamber Letter to the House and Senate Committees on Health,
Education, Labor and Pensions (7/24/09, in opposition to Becker, available at
http://www.uschamber.com/NR/rdonlyres/ettxevxhnekd3wkr3cqekv7c6frknxbzziu52m3jmw74itsnlttljywtuk4qflagv
hz2ij4l2mh3fsozgka3xz44dzc/090724_becker.pdf (last accessed 1/26/10); Miklave, Matthew T., Employee Free
Choice Act: Reexamining Duty to Bargain, EpsteinBeckerGreen (5/8/09), available at
http://www.ebglaw.com/showArticle.aspx?Show=10885 (last accessed 1/26/10). 116
See, e.g., O‘Brien, Michael, Gagging Employers, Human Resource Executive Online (1/21/01), available at
http://www.hreonline.com/HRE/story.jsp?storyId=325172322&topic=Main (last accessed 1/26/10) 117
See, e.g., U.S. Chamber Challenges Pro-Union Oregon Law Limiting Employers' Free Speech Rights (12/22/09),
available at http://www.uschamber.com/nclc/091222_pr.htm (last accessed 1/22/10).